MOSCOW (
MRC) - An increase in the supply of polypropylene (PP) led to a decrease in prices in the Russian market in the second half of April. Weak demand and lower prices in the foreign markets continued the downtrend of PP prices, although not all sellers adjusted their prices, according to the
ICIS-MRC Price Report.
The first three months of the year were quite difficult for Russian converters. There was a lack of supply in the market and prices were growing almost weekly under the pressure of the situation in the foreign markets. The supply of polypropylene from some producers increased in April, and the pressure on prices from export markets also eased.
From the middle of the April, polypropylene in Russia began to gradually fall in price, and this process accelerated for some products in May. At the same time, it is worth noting that not all sellers agreed to adjust their PP prices.
Demand for PP has decreased significantly in May. Demand was under pressure from both the long May holidays and the high cost of polypropylene, which many converters with delay and difficulties shifted to the cost of finished products. And due to a lack of working capital and a decrease in demand for finished products, some of the converters reduced the utilisation of capacities, including quite large ones.
Also, additional pressure on demand in the current month was put by converters' expectations of a decrease in polypropylene prices. One of the price growth drivers in Russia in the first three months of the year was the Turkish market, but the situation there changed dramatically in April.
And some Russian companies began to receive "interesting" offers for PP supplies from Asia, including China.
Low demand for polypropylene from converters and sufficient supply, including imports for some types, led to a further decrease in prices.
So, if at the end of April the prices of homopolymer PP were on average at the level of Rb170,000/tonne CPT Moscow, including VAT at a number of sellers. At the end of May, some sellers dropped their prices below the level of Rb160,000 - 165,000/tonne CPT Moscow, including VAT, depending on the type of homopolymer PP.
MRC